The Asian Development Bank (ADB) has withdrawn loan approval of $434.25 million for a 1 GW solar project in Assam following a request from India’s Finance Ministry.

The solar projects were to be implemented under the ‘Mukhya Mantri Sauro Shakti Prokolpo’ program.

A 500 MW solar project and a battery energy storage system were to be set up in the state’s Karbi Anglong district. Another 250 MW solar project was planned in the same district, out of a total 1 GW capacity.

The Finance Ministry received a request from the Assam government to cancel the loan following protests by local tribal communities, who opposed the land diversion and displacement of people in 24 villages in the district for the project.

Last year, the Assam government invited proposals from consulting firms for project management services for the 1,000 MW solar projects.

The ADB loan, approved last October, also included a $1 million technical assistance (TA) component from the Clean Energy Fund under the Clean Energy Financing Partnership Facility. The loan was aimed at enhancing Assam’s institutional capacity to promote and implement public-private renewable energy transactions.

The TA was designed to build the capacity of Assam Power Distribution Company in renewable energy, develop a solar project pipeline for private investment, and promote renewable energy skills and livelihoods.

In its Resettlement and Indigenous Peoples Plan, the ADB had said that out of the18,000 bigha (2,400 hectares) of land required to be acquired, 16,511 bigha (2201.5 hectares) belong to the Karbi Anglong Autonomous Council (KAAC) and 1,489 bigha (198.5 hectares) is customarily-owned land by the indigenous people/ scheduled tribes for which KAAC has issued customary rights to the land users.

The ADB assessed that most households (54.8%) lose less than 10% of their total land, followed by 32.9% losing between 10% and 20%. None of the households is rendered landless.

Conflict Over Land

There have been several instances of protests by people over land acquisition for industrial projects, including clean energy projects, across India. Challenges associated with land acquisition pose a significant challenge for renewable energy projects.

Some renewable energy projects have also come under scrutiny from local communities and interest groups due to environmental concerns.

In two leading renewable energy states – Rajasthan and Gujarat – a petition by an environmental NGO led to the stalling of multi-GW-scale solar and wind projects after the Supreme Court ordered that overhead transmission lines be taken underground to save the endangered Great Indian Bustard in 2021.

More recently, a ₹80 billion (~$918 million) pumped storage project has faced opposition from local communities and environmental groups in Karnataka. The project entails the acquisition of 153 hectares of land. The project area is also home to the lion-tailed macaque. Conservationists fear the project will adversely impact the critically endangered primate’s numbers.